INCENTIVIZING ZERO EMISSION VEHICLE PURCHASESIN …FUNDING DEDICATED TO REBATE PROGRAMS State...
Transcript of INCENTIVIZING ZERO EMISSION VEHICLE PURCHASESIN …FUNDING DEDICATED TO REBATE PROGRAMS State...
INCENTIVIZING ZERO EMISSION VEHICLE PURCHASES IN VERMONT
Eric JungTianhao Zhang
T H E C L A S S O F 1 9 6 4 P O L I C Y R E S E A R C H S H O PC e l e b r a t i n g 1 0 Y e a r s o f S e r v i c e t o N e w H a m p s h i r e a n d V e r m o n t
OVERVIEW
• Context and methodology
• Financial programs• Rebates
• Tax credits and refunds
• Non-financial programs• Marketing
• Raffles
• Parking
• Economic benefits of incentives
• Market limitations
CONTEXT
• 2013 Zero Emission Vehicle (ZEV) Memorandum of Understanding (MOU)
• 2014 Vermont Action Plan• Recognizing importance of consumer
incentives and outreach
• Vermont’s current programs
METHODOLOGY
• Collect and analyze data provided by internal and external reports
• Interviews with representatives from various state agencies, public-private coalitions, nonprofit organizations, and other key ZEV stakeholders
• Josh Boone, California PEV Collaborative
• Keith Malone, California PEV Collaborative
• Lisa Macumber, California Air Resource Board
• Elise Keddie, California Air Resource Board
• Lyz Hoffman, Santa Barbara County Air Pollution Control District
• Adam Ruder, NYSERDA
• Justin Mabrey, Maryland Department of the Environment
CRITICAL FACTORS FOR ZEV PURCHASE
Source: ”Drive Electric Vermont Case Study,” U.S. Department of Energy (2016)
0 10 20 30 40 50 60 70 80 90
R E D UCE C O ST
E X T END ED R A NGE
B R O A D ER A V A IL A BIL ITY
C H A R GING I NFRA STRUCTURE
V E R M O N T C A S E S T U D Y
EFFICACY OF FINANCIAL INCENTIVES
• U.S. Department of Energy report
• Decreasing purchase price of vehicle by little as 10% would increased market share by to 80%
• State of Oregon study
• Concluded that robust rebate program is required to meet its 10-Year Energy Action Plan and benchmarks per the ZEV MOU
• Found correlation between states with highest financial incentives and highest ZEV sales (e.g., California and Washington)
FUNDING DEDICATED TOREBATE PROGRAMS
State Program Inception
Funding Dedicated
($)
ZEVs Sold, 2011–2016
ZEV Target by 2025
California 2010 ~438,000,000 247,515 1,500,000Connecticut 2015 ~5,000,000 4,994 154,000Maryland* N/A 8,937,188 8,080 304,210Massachusetts 2014 ~10,200,000 8,745 302,000NewYork N/A N/A 20,139 843,000Oregon N/A N/A 11,077 33,000Rhode Island 2016 500,000 862 43,000Vermont 2014 ~200,000 1,601 35,000
REBATE AMOUNT BY STATE
State FCEV BEV PHEVCalifornia 5,000 2,500 1,500Connecticut 5,000 Up to 3,000 Up to 3,000Maryland Up to 3,000 excise tax creditMassachusetts N/A 2,500 1,500NewYork* 2,000 2,000 2,000Oregon N/ARhode Island Up to 2,500Vermont Up to 1,000
REBATES
• Vehicle subsidies, particularly rebates and point-of-purchase incentives, are the leading factor in motivating consumers to purchase ZEVS
• Largest Nissan LEAF markets emerged in states (California, Georgia, and Washington respectively) with the relatively strongest financial incentives
• MSRP of new 2017 Nissan LEAF is $30,680
REBATES: INCOME CAP
• Income cap• Cost-effective and maximizing utility
• Equalize and broaden market for lower income brackets (and thereby more consumers)
• Median income of consumers in MA is between $150,000 and $199,999
• Conduct detailed demographic research
TAX INCENTIVES
• Implementations in different states
• Mediocre performance on boosting ZEV sales
• Not as effective as rebates
• U.S. Department of Energy report
• Tax credits are likely to be half as effective as a rebate in incentivizing
• Present value for consumer is higher with rebates than future tax decrease
• Tax liability may affect whether a consumer is eligible or not for a credit
THE NEED FOR MARKETING
• Low consumer awareness of incentives
• California: 35%
• Oregon: 18%
• Washington: 17%
• Maryland: 16%
• Over 60% of MA respondents learned about rebate program through dealership
• Self-selective
• Dealership challenges in VT
• Maryland solution
MARKETING SOLUTIONS
• Need for outreach but mindful of cost
• Taking advantage of public spaces (e.g., state offices, courthouses, motor vehicle agencies, town halls)
• Direct mass mailers
• One-on-one direct consumer interface is key
• Staff booths at community events (e.g., wine and beer festivals, farmers’ markets)
• Partnerships• Possibility of Vermont or Northeast partnership with California PEV Collaborative
and its members, including critical members of auto, utilities, and EV supply industries
CA PEV COLLABORATIVE’S MEMBERS
• Auto manufacturers
• Tesla
• Honda
• Daimler AG
• Nissan
• BMW Group
• Kia
• General Motors
• Ford
• Subaru
• Toyota
• Utilities and supplier sector
• Advanced Energy Economy
• Chargepoint
• Pacific Gas and Electric Company
• PlugShare
• Southern California Edison
• Other stakeholders
• UC Davis, Institute of Transportation Studies
• UCLA Luskin Center for Innovation
• Union of Concerned Scientists
• The Greenlining Institute
• Natural Resources Defense Council
• Center for Sustainable Energy
RAFFLES
• Economic incentive to participate
• Incorporate into popular auto-related events
• Promote awareness of ZEV
• Inform public of benefits
• Raise money
FREE, PREFERENTIAL PARKING
• Uncommon practice among states
• Inexpensive and easy to administer
• VT context of having few urban centers
• Assess appeal of the program by analyzing demand for parking
RETURN ON INVESTMENT
• Financial returns
• Positive economic impact for states
• University of Michigan and U.C. Berkeley studies
• Vehicle electrification would contribute about $80 million annually to the Oregon economy by 2020 (offsets lost gas tax revenue)
ADOPTIONRATE
EMPLOYMENT LABOR INCOME
LOW GDP ESTIMATE
HIGH GDP ESTIMATE
REVENUE
15% of new car sales
1,544.5 $62,960,474 $113,322,919 $182,338,780 $11,997,795
45% of new car sales
1,912.3 $77,987,435 $140,074,117 $225,769,644 $14,745,577
Source: ”The Returns to Vehicle Electrification,” Drive Oregon (2015)
RETURN ON INVESTMENTS (CONTINUED)
• Long-term gain for short-term spending
• States found that incentives can be funded through predicted revenue from ZEV adoption
• E.g., Oregon could fund the purchase of 21,000 ZEVs (4.5 times as many ZEVs registered currently)
• Necessary to expand nascent market
• Taking advantage of a positive feedback loop
• Critical mass of ZEVs will lead to even more adoption (e.g., through private investment in ZEV technology, infrastructure, etc.)
MARKET LIMITATIONS
Source: ”ZEV Market Report: November 2016,” Drive ZEV (2016)
CONCLUSION